If you’re thinking about expanding your business to global markets, the experience is challenging but can give you satisfactory results. Some of the factors that challenge many business owners are the strategies to use, countries to expand to, and the amount of capital they require. Often, businesses enter the global market where strict rules and regulations apply, with a lot of ambition only to fail. Below are ways you can enter the global market and be successful.
Exporting
Exporting products directly to foreign countries is the most common way to enter global markets. Direct exporting is simple; you sell products to markets that you’re trying to break into. All you need to do is research the markets where your products will do well, gather resources, and work with your networks in exportation. They will act as your distributors and agents and as links between you and those markets.
Forming partnerships
Partnering could mean anything from working with a foreign marketing company or a party that invests in all facets of your business in the global market. Partnering with people or businesses in global markets is an ideal way to expand. This is especially in countries where you can’t break ground as a foreigner. When you’re vetting potential partners, ensure you do a thorough job in researching and interviewing them. You can also get referrals to make sure you’re working with someone who will help your business grow.
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Franchising/ licensing
Franchising and licensing are almost similar, but there are differences. With franchising, you approach a business in your target market to be your franchisee. The franchisee pays a certain fee or gives you a cut of the profits annually. Licensing, on the other hand, involves approaching foreign companies and convincing them to sell your product. Thus, the company owns it temporarily, without you losing control of it.
Buying a business
Buying an established business in a foreign market is the easiest way to go global, but the initial cost might be high. Some of the advantages of buying a business include getting existing clientele and the ease of bypassing government regulations for new businesses. Although it has its downsides, you can be well on your way to success before you know it.
Perform extensive research, gather enough resources, and establish contact with the business. Since it might be too expensive to purchase a business from your savings only, source financing but avoid payday loans that can put you in debt for a long time.
Joint ventures
A joint venture involves partnering with a person or a company and investing in a project where profits are split accordingly. Usually, you and the other company are separate, but getting into a joint venture is an ideal way to enter global markets as you share in the expenses and losses, if any. The workload also reduces, but you must do your due diligence to find a partner you can level with.
Bottom line
Entering a global market requires a strategy to be successful. While no two markets or industries are similar, leverage the power of data to determine where your business fits and the best business strategy to undertake. You can choose to export your products, get into a joint venture, franchise, license, or buy a business altogether.